LONDON, May 22 (Reuters) - European shares hovered near three-week highs on Friday, boosted by a dip in the euro on currency markets, although luxury goods stocks underperformed after weak sales figures from Richemont.

The pan-European FTSEurofirst 300 index advanced 0.2 percent to 1,622.12 points going into the close of the trading session. The index has risen nearly 20 percent since the start of 2015 and was at its best level in around three weeks.

European equities have rallied this year on the back of a government bond-buying programme and record low interest rates from the European Central Bank (ECB). These have hit returns on cash and bonds and driven investors over to the better returns on offer from the stock market.

This has also pushed down the euro on currency markets, benefiting European exporters and European stock markets, and the ECB said this week that it would step up its bond-buying programme in the coming months.

The euro touched a 3-1/2 week low against the U.S dollar on Friday, with ECB President Mario Draghi reiterating his call for euro zone countries to reform their economies, warning that future growth would remain modest.

“It is certainly too early to fight the ECB,” said Phoebus Theologites, chief investment officer at SteppenWolf Capital, referring to the dangers of betting against the rising trend on European stock markets.

LUXURY GOODS STOCKS FALL

Germany’s DAX, which hit a record high of 12,390.75 points in April, edged down 0.2 percent to 11,8941.28 points while France’s CAC was flat.

Trading volumes were relatively thin ahead of public holidays in Britain and the United States on Monday.

Greek shares fell, with the head of the International Monetary Fund warning on Friday that a potential deal to resolve the country’s debt crisis still required much work.

Greece expects to reach a cash-for-reforms deal with its creditors in the next 10 days and aims to meet all its payments in June, the government’s spokesman said on Friday, after the prime minister met European Union leaders.

Richemont fell 0.8 percent, after reporting weak sales and warning that trading remained tough in its key Hong Kong and Macau markets.

Richemont’s decline dragged down the shares of rival luxury companies such as Swatch and Kering.

However, mobile network operator Vodafone rose 4.3 percent on upgrades from Citigroup and Deutsche Bank, with both citing comments earlier in the week from Liberty Global chairman John Malone that Vodafone would be a “great fit”.

Corporate takeover speculation, as well as the ECB’s economic stimulus measures, have protected European stock markets from any prolonged setback this year, despite the lingering worries over Greece.

Nevertheless, some traders were starting to adopt a more cautious attitude in general, and looking to cash in on the European rally so far.

“We are looking to sell into strength at the moment, coming into the summer months,” said Logic Investments’ Harry Shann.

Today’s European research round-up (Additional reporting by Atul Prakash; Editing by Andrew Roche)